Museums may present the past, but they are above all acts of faith in the future. Objects prized by one generation are given, to be freely studied and enjoyed by those who come after, making every one of our public museums and galleries - and Britain is uniquely rich in them - a house of gifts. And only through gifts can they survive and flourish.

The British Museum is typical. Since its creation by Parliament in 1753, its unparalleled worldwide collection has been constantly extended and refreshed by the generosity of hundreds of individuals in a public-private partnership that enables the museum steadily to add both ancient and contemporary objects. It is thanks only to this generosity that the British Museum remains in the fullest sense a museum of the world for the world, a place where the histories that we need to understand in today's world can be researched and told.

One of those histories is Japan's. The British Museum's Mitsubishi Corporation Japanese galleries tell the story of Japan from the Stone Age until today. A key part of that narrative, presented through prints, is of the 19th-century Japan that so eagerly embraced European modernity and then, in return, transformed European aesthetics.

The recently promised gift of Arthur R.Miller will revolutionise our collection of Japanese prints by Utagawa Kuniyoshi (1797-1861) of the Ukiyo-e or “floating world” school, and greatly strengthen the account of Japanese visual culture that we can offer. Indeed the British Museum at a stroke becomes perhaps the richest European collection in this area. Kuniyoshi's most memorable works bring to imaginative life Japan's epic samurai history. But he also records the lives of actors and courtesans who worked to provide entertainment to the vast 19th-century city of Edo (Tokyo). The prints are both social documents and significant aesthetic achievements.

Comprising nearly 2,000 prints, Professor Miller's gift is one of the largest single donations of this kind of material to any UK museum. It will benefit not only the visiting public but also students, scholars and artists alike. The collection, valued at several million dollars, is being given to the American Friends of the British Museum in several stages. It is a striking demonstration of the value of the tax structure in the US that favours lifetime giving to museums and that has helped to create the great American collections that we all admire. The gift also serves to highlight the noticeable lack of this kind of tax structure in this country.

Success stories are rightly worth celebrating but they should not obscure the increasing need to encourage more private giving in Britain. The legal situation in America allows for a kind of lifetime philanthropy with tax breaks to encourage generous donations. In the UK, the Acceptance in Lieu scheme has been an enormous success, bringing in more than £250 million-worth of works into the cultural sector on the death of donors, but there is no comparable tax relief that is advantageous for the living. With no tax relief on gifts of objects to museums, galleries, libraries or archives, there are few incentives that encourage sustained lifetime giving.

It would be a relatively simple matter to apply the principles of the Acceptance in Lieu scheme to living donors. They would benefit through tax relief and the public would benefit hugely through enjoyment and engagement with the objects presented. At the moment, American taxpayers enjoy greater fiscal incentives to give objects to UK collections than do their British counterparts - an anomaly that ought to shame us into speedy action. Of course, we cannot know the extent to which the UK tax regime has deterred potential donors, but looking at the level of American lifetime giving, we can be certain that we have lost out in the past.

What else can be done? Other options are set out in the manifesto, Private Giving for the Public Good, published by leaders of our main cultural institutions in April. They involve expanding the use of Gift Aid to include works of art, making the system more user friendly or encouraging the generation of lifetime legacies, with capital gains tax and inheritance tax exemptions similar to conventional legacies. All or any of these ideas would help to create a national culture of giving from which we would all benefit.

This is especially important in the area of modern and contemporary works from outside the UK. It is almost impossible outside London - and only patchily possible in it - for students to form any serious idea of international visual culture in the past 50 years. Our public collections in this field have fallen far behind their equivalents in Germany, France and the Netherlands. Auction figures for Lucian Freud of over £60million and record prices for antiquities are graphic illustrations of the inability of publicly funded museums and galleries to continue to acquire at the top level. Lifelines such as the Art Fund and the National Heritage Memorial Fund, alongside friends' and members' organisations in numerous institutions, all give generously where they can, but the demands on them are high and will only increase. Lifetime giving provides an effective and easily administered alternative. For many museums across the country, donation is the only option if they are to continue to add to and improve their collections.

This week's New York auctions suggest that the era of record-

breaking arts sales is over. The end of the boom may create a friendlier environment in which collectors are keener to donate to museums rather than sell to the highest private bidder. This is just the right time to encourage would-be philanthropists with a decent tax incentive.

Tax relief for lifetime giving will encourage donations by benefiting the donor, but crucially it will also benefit the public, giving them access to examples of human cultural achievement. If we do not encourage a national culture of giving to all British institutions, collections will remain static and lose contact with the modern world.

For 250 years, government has been a generous supporter of acquisitions by public collections, but it can no longer do so alone. As part of its drive to foster wider philanthropy it must now move to encourage private individuals to play a bigger part in enriching our collections, so that our generation can make its gift to the future.

Neil MacGregor is the director of the British Museum

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